B-School Profs Pile On Against Trump

It’s been less than a week since white supremacists, white nationalists, and neo-Nazis descended upon Charlottesville, causing the eyes of the nation to turn to the small Virginia town. While President Trump has been called out on everything from not being specific enough when condemning those who were responsible, to his assertion that “many sides” are to blame, the backlash continued yesterday when prominent CEOs on two of his business advisory councils began to disperse.

In this aftermath, professors at the top business schools took to social media and national news media to chime in on the business implications. Poets&Quants gathered a round-up of some of the most notable.

Bob Bruner, the former long-time dean of the Darden School of Business in Charlottesville wrote this blog post: When to decamp? The post is rhetorically formatted and gives CEOs six questions to ponder should they find themselves having to decide, “Should I stay or should I go?”

CHURN IN AN ORGANIZATION A SYMPTOM OF ILLNESS

“The decision of whether to quit or stay in President Trump’s business councils is a specific example of a fascinating problem in political economy,” Bruner writes. Referencing Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States written by Albert O. Hirschman, Bruner continues, “A high rate of exit or “churn” in an organization is a symptom of illness and is typically caused by a toxic culture and the suppression of dissent. We should watch out for more departures from President Trump’s councils as a telltale of (in)stability within the administration—and listen carefully as any more CEOs go.”

Yale SOM tweets reactions from management professor Jeffrey Sonnenfeld

Yale School of Management’s Jeffrey Sonnenfeld went to Facebook for a live discussion on how business leaders should participate in politics. “Over the last 24 hours, I’ve heard from two dozen CEOs of Fortune 500 firms having emergency board meetings,” the Senior Associate Dean for Leadership Studies and professor of management said. “This is a chance for the business community to fill some of the leadership void.”

If you don’t have time to watch the 22-minute long recording in its entirety, you can head over to the SOM’s Twitter page for more of the highlights.

FOR CEOs, COST OF ALIGNING WITH THE PRESIDENT IS TOO HIGH 

Speaking to various media outlets, Anit Admati, a finance and economics professor at Stanford said Trump put members of his CEO advisory council in a very difficult position while Tuck’s Sydney Finkelstein said CEOs have to weigh the risk of denouncing Trump or steering clear of him post Charlottesville. According to Finkelstein–who is a management professor and director of Tuck’s Center for Leadership–CEOs are explicitly in agreement with how the administration has handled things when they choose not to speak up.

“But you can’t just sit on the sidelines if you are a leader, if you have hundreds of thousands of employees and millions of customers. That is an abdication of your responsibility as a leader,” he told USA Today.

Also speaking to USA Today, Columbia Business School management professor Bill Klepper weighed in saying that businesses are finding that the cost of alignment with the president is too high.

In a Fortune column on Wednesday, Robert Strand a Haas lecturer and executive director of the school’s Center for Responsible Business concluded, “Business leaders everywhere should cease engagement with Trump Inc. and work to ensure a different investment opportunity for 2020. We would all profit from a portfolio screened of Trump Inc.”

David Bach from Yale School of Management tweets his disagreement with the president

The day prior, Yale’s David Bach, previously recognized as one of Poets&Quants’ Top 40 Business Professors Under 40 Years Old, expressed outright disagreement with the POTUS on the idea that departing advisory council members weren’t taking their jobs seriously. In a news report, the deputy dean and management professor said, “Just as Elon Musk would have lost credibility with his employees and customers after Paris had he remained, Frazier – one of the nation’s most respected African American business leaders – could not have quietly continued after Trump’s reaction to Charlottesville.”

Bach followed up with a HuffPost column outlining the phases, he sees, that brought CEOs and businesses to this point. In asking where do we go from here, the professor wrote, “Make no mistake: business and leading CEOs will remain engaged in Washington. Yet the rupture between the country’s leading CEOs and President Trump is a watershed.” 

Finally, the latest B-school professor to add to the conversation is Nicholas Pearce. The management professor from the Kellogg School of Management penned a column for CNBC, today, stating that business leaders have a unique opportunity to leverage collective influence for change. “CEOs cannot afford to appear complicit through inaction, which would be a tacit endorsement of the president, his ethics, and his agenda. It is time, CEOs.”

 

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